Guidelines designed to help plan administrators institute good governance practices
Draft guidelines to improve pension plan governance along with an organizational self assessment were released by the Canadian Association of Pension Supervisory Authorities, last month.
The guidelines are designed to help plan administrators institute good governance practices, defined as the structure and processes for overseeing, managing and administering a pension plan to ensure fiduciary and other obligations are met. The self assessment is intended to help administrators determine how successfully their plans follow effective governance principles. Though intended to improve governance, the guidelines are voluntary and not intended to create additional obligations.
“CAPSA believes good pension plan governance is essential if plan members are to both receive the benefits and values they are entitle to, and to understand their rights and responsibilities under the pension plan,” the association states. CAPSA develops policies to simplify and harmonize pension law across Canada.
The guidelines are structured around 11 separate principles covering a range of issues like defining roles and responsibilities, access to information, and risk management.
Transparency and accountability are key components. Guidelines state, “The plan administrator should provide for the communication of the governance process to plan members, beneficiaries and other stakeholders to facilitate transparency and accountability.”
Jayne Casanova, a pension expert with Watson Wyatt said, the new guidelines will mostly benefit smaller plan sponsors.
Many large, multi-employer plans are quite sophisticated and can commit a lot of resources toward good governance, she said. They have been aware of the importance of good governance since the Hees Enfield pension decision in 1995. Large employers, for the most part, don’t have a problem.
On the other hand, many of the smaller, plans do need help to improve governance.
The guidelines are designed to help plan administrators institute good governance practices, defined as the structure and processes for overseeing, managing and administering a pension plan to ensure fiduciary and other obligations are met. The self assessment is intended to help administrators determine how successfully their plans follow effective governance principles. Though intended to improve governance, the guidelines are voluntary and not intended to create additional obligations.
“CAPSA believes good pension plan governance is essential if plan members are to both receive the benefits and values they are entitle to, and to understand their rights and responsibilities under the pension plan,” the association states. CAPSA develops policies to simplify and harmonize pension law across Canada.
The guidelines are structured around 11 separate principles covering a range of issues like defining roles and responsibilities, access to information, and risk management.
Transparency and accountability are key components. Guidelines state, “The plan administrator should provide for the communication of the governance process to plan members, beneficiaries and other stakeholders to facilitate transparency and accountability.”
Jayne Casanova, a pension expert with Watson Wyatt said, the new guidelines will mostly benefit smaller plan sponsors.
Many large, multi-employer plans are quite sophisticated and can commit a lot of resources toward good governance, she said. They have been aware of the importance of good governance since the Hees Enfield pension decision in 1995. Large employers, for the most part, don’t have a problem.
On the other hand, many of the smaller, plans do need help to improve governance.
